Buckeye announces closure of its Americana, Brazil, cotton linter pulp line, citing high cost of cotton linter raw material supply; closure to result in US$2.4M restructuring expenses, termination of 60 employees
January 12, 2012
– Buckeye Technologies Inc. (NYSE:BKI - News) today announced the closure of its Americana, Brazil cotton linter pulp production line. The company will work closely with its customers to continue to meet their needs from its Memphis, Tennessee facility.
Buckeye's Chairman and Chief Executive Officer John Crowe said, “This closure has become necessary due to the facility’s uncompetitive cost position for the products it makes. This is primarily driven by the high cost of its cotton linter raw material supply. It is unfortunate that this closure will result in the termination of employment for approximately 60 dedicated employees. We have owned and operated the facility since 2000, and we value and appreciate the many contributions of the organization over the past 12 years. Buckeye will continue to operate the waste water treatment facility for the shared industrial site while we continue discussions with interested parties for the sale of the facility.
We expect to incur about $2.4 million in restructuring expenses in calendar 2012 and a non-cash asset impairment charge of about $49 million in the October-December 2011 quarter. The closure is expected to generate an approximate $20 million cash benefit, primarily due to tax benefits related to the investment loss, assuming we are able to utilize all of our potential cellulosic biofuel credits by June 2016. Any additional cash benefit will be dependent on the final outcome of the facility sale process.”
Buckeye, a leading manufacturer and marketer of specialty fibers and nonwoven materials, is headquartered in Memphis, Tennessee, USA. The Company currently operates facilities in the United States, Germany, Canada, and Brazil. Its products are sold worldwide to makers of consumer and industrial goods.
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